Archive for 2015

Updates on superannuation and health care contributions – the private sector

From 1st January 2016, these new rules on compulsory superannuation and health care contributions apply to private sector employers and employees:
For employers, contributions are:
1. Superannuation = 14% base salary
2. Health care = 3% base salary
3. Work safe = 1% base salary
4. Parenting benefits = 3% base salary
For employees, contributions are:
1. Superannuation = 8% base salary
2. Health care = 1.5% base salary
The government decrees on base salary in according to regions. If contract salary is higher than base salary, then the base salary is replaced by the contract salary.
For skilled workers, then contributions are calculated on base salary plus 7%.
For hazardous working environment, then contributions are calculated on base salary plus 5%.
The contribution rates are quite high if compared with other countries, but the government seems determined to bring the superannuation and health care system to the mass of the workforce. News headlines suggest that the Social Security Department may increase inspections and penalties for non-compliance with the rules.
References:
1. Law on Social Security 2014 (Law No.58/2014/QH13)
2. Decision 959/QD-BHXH dated 09/09/2015

Government-Approved Consumer Contracts

In Decision 35/2015/QĐ-TTg dated 20/8/2015, the Prime Minister decided these contracts below to sell the goods and services to consumers in Vietnam must be approved by and registered with the Ministry of Industry and Commerce in order to be effective:
1. Household electricity
2. Household water
3. Cable TV
4. Fixed phone
5. Mobile phone
6. Internet
7. Air ticket
8. Railway ticket
9. Corporate apartments
10. Credit cards, personal bank accounts, consumer loans
11. Life insurance

Conventional practices in Vietnam suggests that where goods and services are supplied not in the terms of statutory contracts, suppliers may face administrative penalties by the Ministry of Commerce and Industry. Consumers may insist that statutory terms and conditions apply if they find their contracts with the suppliers are less favourable.

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